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Good point, and I'm glad you raised it. It is disconcerting to me why people are considering how to take advantage of the federal subsidy, without considering the probable impact at the point of service.

Quote:

Originally Posted by Gotadimple

My point is that currently those on Medicare and Medicaid (the public option) are becoming marginalized. The point of service for their care continues to erode as physicians and other providers refuse to provide services due to the negotiated payment schedule, which continues to be the lowest compensation available....

A good segment of conversation in this thread relates to understanding how the subsidy could be applied in a personal situation. I am suggesting to those considering it, to also consider that you get what you pay for, and if you are able to pay for private insurance, you consider the consequences of moving from private insurance to public insurance. ...

I find this confusing as well. People getting subsidies are not moving from private insurance to public insurance. They remain on private insurance. And, while it is true that some doctors are refusing to participate in Medicare because of reimbursement rates, that will not apply to private sector health plans under the plan approved. Most of us (until we are 65) will continue under the same old plans we are under or new plans under the exchanges. We will have the same advantages and disadvantages we have now (e.g. will my doctor participate in the BC/BS PPO, Aetna, GEHA, etc).

Just a final nit, you describe Medicare as "the public option." Medicare is a form of single payer -- not at all the "public option" that was proposed early in the health care debate.

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Every man is, or hopes to be, an Idler. -- Samuel Johnson

What was not solved is the provider payment schemes which continue to be the primary driver in why health insurance premiums are so expensive.

I agree with you here. The "provider payment schemes" (that is, the fact that providers aren't directly paid by the people receiving the services) are the primary driver for higher health costs. These higher health costs are the primary driver behind higher "insurance" rates.

For every dollar's worth of health care that Americans received last year, they paid a dime and somebody else paid 90 cents. If you bought food the way you buy health care—where 90% of everything you put in your basket was paid for by your grocery insurance policy—you would eat differently and so would your dog.

I find this confusing as well. People getting subsidies are not moving from private insurance to public insurance. They remain on private insurance. And, while it is true that some doctors are refusing to participate in Medicare because of reimbursement rates, that will not apply to private sector health plans under the plan approved. Most of us (until we are 65) will continue under the same old plans we are under or new plans under the exchanges. We will have the same advantages and disadvantages we have now (e.g. will my doctor participate in the BC/BS PPO, Aetna, GEHA, etc).
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". . .States will create American Health Benefit Exchanges where individuals can purchase insurance . . . Premium and cost-sharing subsidies will be available to
make coverage more affordable.

Although there will not be a public plan option in the Exchanges, the Office of Personnel Management, which administers the Federal Employees Health Benefit Program, will contract with private insurers . . . Plans in the Exchanges will be required to offer benefits that meet a minimum set of standards. Insurers will
offer four levels of coverage that vary based on premiums, out-of-pocket costs, and benefits beyond the minimum required plus a catastrophic coverage plan."
==================================
So, subsidies/credits will only be available to individuals purchasing within the exchanges. Once an individual chooses a plan offered in a Health Exchange, they are signing up for one of four benefit packages. The benefit design is administered by the government (Office of Personnel Management).

While the rules for what OPM will "administer" haven't been written, they currently administer the FEBHP by setting provider compensation, designing the benefit plans, and setting the rates for premiums. Once you have government negotiating payment rates and benefit design (rather than the marketplace), you have a public option.

If the rates are not competitive with what the private insurers can offer, you have a continued problem with access to care. There will be no substantive change to what insurers do in the marketplace, and there is no guarantee that the plans offered in the Exchange will be represented by a majority of the private carriers -- only that there be at least two carriers, one being a not for profit.

You are correct, for the majority of people who currently have access to health insurance, nothing needs to change. For those thinking about how the Health Exchanges and subsidy/credit option can be beneficial, I am only saying one needs to be aware that the benefits might not be the same, and if Medicare is any example, there may be problems with access to the health care providers.

That doesn't mean that the Federal Employee program is one where the access or benefits are restricted -- because they are not. Federal employees enjoy benefit plans that can be broader than what an individual can buy in the marketplace today.

You are correct, for the majority of people who currently have access to health insurance, nothing needs to change.

Nothing *needs* to change, particularly with the employer-sponsored group plans. But if these do wind up adding higher taxes on the benefits they provide, then I'd expect them to be watered down -- or even eliminated and replaced by some extra pay to go out and buy our own.

__________________"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?"-- Joe Dominguez (1938 - 1997)

I think that the health care bill will have some great benefits for me. I am 33 and would like to semi-retire in my mid 40s. Specifically I'd like to switch to contract or part-time work in the IT industry.

I think that this new law will make my goal much easier to attain. Working part-time or as a contractor usually requires you to buy your own health insurance. Although I am in perfect health, I am very glad that there will no longer be the possibility of being denied coverage.

Another benefit of this law for those that are older and would like to continue w*rking is that I believe it will greatly diminish age discrimination. Although I have no evidence to back this up my assumption is that most age discrimination is due to employers wanting to avoid paying the higher health care costs. Now that the costs are being spread out, perhaps this won't be an issue anymore.

I frankly have never trusted insurance companies. I have health care, disability, renters, auto, and an umbrella policy, and I have never needed to collect a cent so far *knock on wood*. However, I don't trust the insurance companies to actually pay up. I basically consider insurance companies in the same light as credit card companies. I assume they are going to try and scam me every chance they can. So, I am very glad to see health care brought under the wing of the government. I believe that health care is going to cost more, and be more inefficient, but I will take that over always second guessing whether the insurance will try to scam me when it comes time for them to pay up.

This may be purely assumption, but I think these plans will allow out of network health care consumption, you just pay more for it (like most plans now). So if the subsidized plans that are available aren't accepted anywhere near you, you may still save money by going out of network and paying the difference in cost (while saving money on premiums due to the subsidy).

Maybe the debate of the future will be to prevent Dr's from discriminating against certain health insurance plans/participants. Although I'm not sure if I want the guy that could be saving my life knowing that I have a buy one get one free coupon paid for out of his taxes!

On a different point, I'll be interested to see how these different metallic branded levels of coverage turn out. Specifically, how the maximum out of pocket costs (based on income level and number in household) will be implemented with the different plans. For example, if my max out of pocket costs are limited to $4000 due to low income, then I may not have any incentive to get better coverage (gold or platinum) if the max out of pocket is capped anyway. And I guess we will still be corralled into bunching semi-elective procedures into one tax year, with perhaps a coincident reduction in income (to keep our out of pocket max as low as possible). You know, get all those knees and hips replaced for everyone at the same time, maybe get some bone cysts removed, and maybe they can throw in some cataract surgery. I mean it is free and I wouldn't be paying for any of it (after my max out of pocket) right?

". . .States will create American Health Benefit Exchanges where individuals can purchase insurance . . . Premium and cost-sharing subsidies will be available to
make coverage more affordable....

(post continues with discussion of the FEHB that may serve as the format for the exchanges)

Not sure I see your point. People who use the exchanges will be getting private insurance, not a public option or some sort of "government" program. The FEHB is private insurance (BC/BS, etc). The exchanges will have to offer plans that meet minimum standards but so will employer plans.

__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson

However, I don't trust the insurance companies to actually pay up. I basically consider insurance companies in the same light as credit card companies. I assume they are going to try and scam me every chance they can. So, I am very glad to see health care brought under the wing of the government. I believe that health care is going to cost more, and be more inefficient, but I will take that over always second guessing whether the insurance will try to scam me when it comes time for them to pay up.

I would venture to say that insurance companies run a distant 2nd in scams when compared to Congress.

__________________“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan

Not sure I see your point. People who use the exchanges will be getting private insurance, not a public option or some sort of "government" program. The FEHB is private insurance (BC/BS, etc). The exchanges will have to offer plans that meet minimum standards but so will employer plans.

Don,
We will continue to disagree about what kind of coverage will be available in the exchanges. My point is that when the FEHP defines the benefit plans, that is what any health insurer who wants to participate in the Health Exchange must offer.

HOWEVER, that is not what the very same health insurer will offer to those who want to buy coverage outside of the Exchange, such as that provided by an employer for his/her employees, or what an individual who chooses not to use an exchange can buy. Most probably, the benefits will be broader in the non-Exchange version, which is fine for those who can afford it.

And the FEHP is not private insurance. The plans that participate have been qualified based on their ability to meet contract standards, and participate in the required data exchange between OPM and the plan. The health plan merely receives an adminstrative fee for processing the claims, and handling customer service. OPM enrolls the employee and collects the premium, BC gets the claims, processes them and gets reimbursed by the US Treasury. In other words, it's mega-corp's self insured plan administered by large insurance carriers for a fee.

I am in a similar situation, being in my 50's and retired with health care insurance. However, my premiums have been rising about 33% per year since I retired (2007). At that rate my premium will be around 7400/month and some change when I hit 65. So expecting health insurance premiums to rise from 1000 to 2500 in the next 8 to 10 years is a little on the low side. I do believe, however, there will be some kind of intervention before I hit 65 that will alter the growth rate of my insureance premiums.

We will continue to disagree about what kind of coverage will be available in the exchanges. My point is that when the FEHP defines the benefit plans, that is what any health insurer who wants to participate in the Health Exchange must offer.

HOWEVER, that is not what the very same health insurer will offer to those who want to buy coverage outside of the Exchange, such as that provided by an employer for his/her employees, or what an individual who chooses not to use an exchange can buy. Most probably, the benefits will be broader in the non-Exchange version, which is fine for those who can afford it.

And the FEHP is not private insurance. The plans that participate have been qualified based on their ability to meet contract standards, and participate in the required data exchange between OPM and the plan. The health plan merely receives an adminstrative fee for processing the claims, and handling customer service. OPM enrolls the employee and collects the premium, BC gets the claims, processes them and gets reimbursed by the US Treasury. In other words, it's mega-corp's self insured plan administered by large insurance carriers for a fee.

My understanding is that the OMP does not define plans today or in this bill. They set standards, define categories and establish minimum requirements, then invite private insurance companies to offer specific plans. They also do not set rates, the rates are set by the insurance companies. The federal gov’t pays part of the premium. Very similar to mega-corp.

I also understand (but cannot source) that once the exchanges are enabled the FEHP will be sourced through the exchanges as well. There is no doubt (IMHO) that the intention is clearly to have private policy offerings that compete in scope and price with the better FE and mega-corp offerings available.

Great comments, everyone. I for one wish that this law had created a public option because truthfully I think that's the only thing that would have seriously reduced costs over the long-run. Also, considering I am healthy, I would like to have the choice between low-cost, long-lines, bureacratic health coverage (which I would happily choose to purchase)versus high-cost premium coverage, but right now it seems my only options are high-cost. At least here in New York, there is nonexistent consumer choice. I do think the public option would have helped with that, and I predict that we'll get that option within five to ten years once people realize that this new law was insufficient.

HI Premiums are deductible if you itemize your deductions on Schedule A and your out-of-pocket medical expenses exceed 7.5% of your AGI.

Our AGI in 2009 was only $8750, and our health insurance premiums totaled $5,581. So I guess I could have deducted much of that. It wouldn't have made a difference this year, but I will use that next year, allowing me to move convert more $ to Roth without paying tax on it. Thanks scrabbler.

I did more research and and found out that most states do not have asset test for Medicaid and CHIP eligibility. California for example do not asset test.

Can anyone confirm this?

OK I found the Medicaid handbook online for my state (Wisconsin). Wisconsin does have an very low asset limit, but apparently does not consider an IRA conversion or distribution as income, just an asset transfer. Supposedly though the feds will prohibit states from having asset tests now, so this could get interesting. I suppose anything can change in the next few years. I'm not sure but I think New York used to not have an asset test, but there was some flack and now they do. Many states supposedly claim they don't want asset tests because they want people to be able to save their way out of poverty. Also there are some cases that draw sympathy such as someone who receives a large settlement for some lifelong injury etc. So I think the best place to look for info is your state's Medicaid handbook.

I would think that even when there is an asset test, a distinction must be made between retirement and non-retirement.

If that is correct it is an important distinction for long term care purposes. I always understood that old folks could only qualify for Medicaid's LTC benefits if they burned up all their assets. I thought that even included homes. Are 401ks/IRA's homes, pension income excluded?

__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson

Well, IM retiring this weekl.
I have employer subsidized HC between now and Medicaire.
However, the new law causes megacorp to give up the tax deduction that had applied to this expense.
So, a few firms are now taking write offs and threatening to reduce retiree HC benefits. Wonderful.
I'm not even retired yet an my benefoits are at risk cause of the new bill.

I would think that even when there is an asset test, a distinction must be made between retirement and non-retirement.

Ultimately, it will depend on what the voters think. It's a good thing to encourage folks to save for retirement, so excluding retirement accounts makes sense from that perspective. On the other hand, the public as a whole get restless when they are barely getting by, can barely afford shoes for the kids, and are paying taxes so that people with $500K in the bank can get public assistance.
My guess is that all assets (including retirement assets and property/real estate) will probably be assessed as income-equivalent under some type of "expected annual distribution" calculation. From the taxpayer's perspective, I think that's fair, though it might end up hurting me personally.
Our policy should be that public assistance is for those who can't help themselves. On the other hand, I think everyone who qualifies under the present rules should take every penny available.

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